conference-preview-monitor









OVERVIEW


With a Conference Committee of three Representatives and three
Senators
meeting to meld the proposals of the two branches into a
final budget to present to the Governor, we are entering the final
stages of the annual budget debate. The House and Senate proposals have
a lot in common: both modestly increase funding for K-12 education and
both make new investments in early education (although in different
ways); both take steps to address the cost increases borne by the state
as the result of fewer employees getting health care coverage from
their employers; and both increase funding for affordable housing to
help reduce homelessness. Both branches also incorporate revenue from
the Governor’s initiatives to require larger on-line
retailers to collect state sales taxes.



There are also significant differences that will need to be worked out
in conference: the Senate provides more funding for higher education
and raises modest amounts of additional revenue by taxing on-line
rentals through services such as Airbnb and by changing the way taxes
are calculated on hotel rooms booked on-line; the House funding
levels are higher than the Senate in several areas including MassHealth
and the Municipal Regionalization and Efficiencies Incentive. The
Senate also included a proposal that was not in the House budget to
begin a process of examining the costs and benefits of tax
expenditures. The state loses over a
billion
dollars a year
in revenue
as a result of various special business tax breaks that are part of our
tax code and not regularly evaluated. In the sections below, this
Budget Monitor describes
all of the major differences between the House
and Senate budget proposals in each section of the budget.



While the May tax revenue numbers came in a little above projections,
overall tax revenue for the year is $439 million below projections with
one month to go. The good news is that revenue from income tax
withholding has been reasonably strong – and that is a good
measure of current economic circumstances. The big drop we saw in April
was due mostly to payments with returns when people filed their 2016
taxes. Part of that drop may have been due to taxpayers with
significant business and investment income anticipating federal income
tax cuts in 2017 and shifting income from 2016 to 2017 (such as by
waiting to sell stocks that had increased in value). But while there
are some positive signs, tax revenue this year is below projections and
there is always the danger that our national economy will weaken. Thus
it will be important for the 2018 budget to be as structurally balanced
as possible. The budgets enacted by the two branches of the Legislature
are already precariously balanced and each relies on over $500 million
in temporary solutions. This is considerably more than the amount
relied on in the Governor’s budget because he had proposed
addressing the state costs of fewer employees getting health care
coverage from their employers by enacting a permanent assessment on
employers who don’t meet certain benchmarks for providing
coverage. That plan would have raised $300 million in FY 2018 and more
in future years. The House and Senate plans would raise only $180
million in FY 2018 and nothing after two years.



The rest of this Budget
Monitor
describes the major amendments adopted
during the Senate budget debate and examines the differences between
the House and Senate proposals. Links from the Table of Contents below
allow readers to jump quickly to specific sections. Each section also
provides links to our on-line budget tools including our Budget
Browser

(which provides funding information for every line item in the state
budget going back to FY 2001) and, where applicable, to our
Children’s
Budget
and Jobs
& Workforce Budget.
When
the proposals track prior recommendations closely, we also provide
links to the detailed descriptions of those proposals in our previous
Budget Monitors.





TABLE OF CONTENTS
























































Overview Early
Education
K-12
Education
Higher
Education
Environment
& Recreation
MassHealth
& Health Reform
Mental
Health
Public
Health
State
Employee Health Insurance
Child
Welfare
Disability
Services
Elder Services
Juvenile
Justice
Transitional
Assistance
Other
Human Services
Transportation
Housing Economic Development Law
& Public Safety
Local
Aid
Libraries Pensions Other Administrative Additional Line Item
Differences
Revenue (tax and non-tax) Summary Chart









EDUCATION



Early Education


During its debate on the Fiscal Year (FY) 2018 budget, the
Senate added
$500,000 to early education and care initiatives. The Senate amendments
primarily provided targeted support to several local programs. These
changes bring the final Senate FY 2018 budget proposal to $587.1
million for early education, much the same as (0.6 percent above) the
House proposal.



The House budget proposal for FY 2018 provides $20.0 million for a
Center-Based
Child Care Rate Increase
, compared to $10.0 million in the
Senate budget. Salary and benefit increases, along with professional
development for early educators are critical to improving the quality
of care available for preschool age kids. In the current FY 2017
budget, $12.5 million was available for this purpose through a similar
Early
Education and Care Provider Rate Increase.



The Senate budget for FY 2018 proposes $15.1 million for the
Commonwealth Preschool Partnership Initiative
to help
communities
expand access to early education, primarily for 3-year-old kids. The
House did not provide funding for this purpose in its budget. For more
detail on this Senate proposal, see Analyzing
the Senate Ways and Means
Budget for FY 2018.



An amendment to the FY 2018 Senate budget would commission a study of
the early education workforce to be undertaken by the University of
Massachusetts at Boston. Another amendment would provide $250,000 to
Reach
Out and Read,
supporting efforts of doctors to promote
reading
and literacy with children and families. The House proposed $750,000
more in funding for this program than the Senate.



For full details on the differences between the final House and Senate
budgets for early education, see the table below.



For information on funding for early education programs going back to
FY 2001, please see MassBudget’s Budget Browser here.





table:: Early education and care line items with funding differences






K-12 Education


During floor debate on the Fiscal Year (FY) 2018 budget, the
Senate
added $9.2 million for K-12 education line items. Overall, the Senate
provides somewhat more funding than the House for K-12 programs
including grant programs and Chapter 70 aid.



In its FY 2018 proposal, the Senate provides $4.76 billion in Chapter
70 Education Aid,
$9.9 million (0.2 percent) more than the
House
proposal (including the Education
Reform Reserve)
. Additionally, the
Senate provides $16.6 million (2.7 percent) more for K-12 grant
programs.



The Senate budget includes an amendment that would implement the
recommendations of the 2015 Foundation Budget Review Commission (FBRC).
Some of the prominent changes would increase rates within Chapter 70
for special education students, English Language Learners, and educator
health care costs. This Senate proposal would also increase the rate of
additional funding provided for low-income students and increase these
amounts sharply as the concentration of kids in poverty rises. The
proposal would result in the doubling of the low-income rate in the
highest poverty cities and towns to $8,500 per-student compared to
$4,200 in the other FY 2018 budget proposals. The Senate amendment
includes a measure to have the Legislature agree to a multi-year
implementation schedule for the
reforms.



A Senate amendment to
Afterschool
and Out-of-School Time Grants
would
create a $100,000 fund to increase access to high-quality afterschool
and summer learning opportunities. The same amendment would provide
$100,000 to a data sharing pilot that would help school districts
collaborate with community-based providers in evaluating the outcomes
of afterschool programs.



The House FY 2018 proposal provides more support than the Senate for
several small grants including:



  • $1.0 million for Programs
    for
    English Language Learners in Gateway Cities,
    which is
    $500,000 more
    than the Senate proposal. This program primarily funds grants for
    summer academies that seek to improve the English language skills of
    middle and high school students in Gateway Cities.

  • $700,000 for
    Statewide
    College
    and Career Readiness,
    which is not funded in the Senate
    proposal. This
    program provides academic support to students in order to promote
    college and workforce success and to reduce remediation in higher
    education.



Conversely, the Senate FY 2018 proposal provides more support in
several other programs including:




For full details on the differences between the final House and Senate
budgets for K-12 education, see the table below. For information on
funding for all education programs going back to FY 2001, please see
MassBudget’s Budget
Browser

here
.


table: K-12 education line items with funding differences









Higher Education


During debate on the Fiscal Year (FY) 2018 budget, the Senate
added
$989,000 for higher education through several amendments. These
additions mostly focused on specific initiatives at several campuses,
including workforce development and scholarship programs. Overall, the
Senate proposal provides greater resources for higher education than
the House. The Senate budget for FY 2018 would provide $1.20 billion
for higher education, which is $29.9 million (2.5 percent) more than
the House. Generally, the Senate budget for FY 2018 provides greater
funding to the direct line items of public higher education campuses.
Higher amounts in these areas could reduce increases to tuition and
fees at public campuses in FY 2018.



A Senate amendment to the FY 2018 budget would create a new line item,
Brewer Center for Civic
Learning and Community Engagement at Mount
Wachusett Community College
and provide $100,000 in
funding. This
center would be focused on increasing service learning and volunteerism
in central Massachusetts. Another amendment would provide $100,000 to
create a veterans educational services center at Bristol Community
College
, joining other similar facilities at other
community colleges.



The table below details appropriations to the three campus types (the
University of Massachusetts, state universities, and community
colleges). MassBudget funding totals in the tables below make two
adjustments to facilitate accurate across-year comparisons of higher
education spending. Since FY 2001, different policies have determined
when public higher education campuses must remit back to the state
different categories of tuition revenue they receive. When this revenue
is remitted, it is not available for campus operations and has the same
effect as reduced state funding. To allow for more accurate comparisons
of state support to campuses over time, MassBudget deducts the amount
of tuition revenue remitted to the state from the direct appropriations
for the affected campuses.



Also, MassBudget adds collective bargaining accounts and initiatives
located at particular campuses that are funded through separate line
items to their respective campus totals. Higher education programs that
are system-wide or within multiple branches (including state
administration, scholarships, and tuition waivers) are included in
overall higher education totals, but are not in the campus-specific
amounts.





table: Higher education funding to the three campus types





For full details on the differences in funding between the FY
2018
House and Senate budgets for higher education, see the table below.





table: Higher education line items with funding differences


higher ed table continued






For information on funding for higher education programs going back to
FY 2001, please see MassBudget’s Budget Browser

here
.






ENVIRONMENT & RECREATION


The state budget funds programs that keep our air, water, and
land
clean, maintain fish and wildlife habitats, and staff and maintain our
parks, beaches, pools, and other recreational facilities. During its
floor debate, the Senate added $5.0 million to parks and recreation
programs for a total of $206.2 million for Fiscal Year (FY) 2018. This
amount is slightly (1.6 percent) more than the amount proposed by the
House. 



The House and Senate both increase funding for environment and
recreation programs above the amount provided in FY 2017. Despite these
slight increases, funding for environment and recreation programs has
fallen by about 30 percent since FY 2001 after adjusting for inflation.





bar graph: Environment and recreation budget down by 30% since FY 2001





Most of the differences between the House and the Senate
budgets are
relatively small with the exception of funding for state parks and
recreation facilities.
The Senate budget provides $39.9
million for the
primary account for parks and recreation facilities, which is $3.0
million more than the House. To help pay for this increase, the Senate
budget proposes transferring a portion of unspent funds from the Race
Horse Development Fund to the Department of Conservation and Recreation
(DCR). (For additional discussion of this transfer, please see the
Non-Tax Revenue portion of the Revenue section of
MassBudget’s Budget
Monitor
on the Senate Ways and Means
Budget
here.)
Both the House and the Senate follow the
Governor’s proposal to allow DCR to keep $20.0 million of the
revenue it raises in parking and entry fees to help pay for upkeep of
parks and recreation facilities. This is an increase of $2.3 million
above the current fiscal year budget. 



For a full list of all funding differences between the two budgets that
will be settled in a House/Senate Conference Committee, see the table
below.



table: Environment and recreation line items with funding differenceshttp://massbudget.org/report_window.php?loc=Analyzing-the-Governor-Budget-for-FY-2018.html#MassHealth





For information on funding for Environment and Recreation
programs
going back to FY 2001, please see MassBudget’s Budget Browser
here.






HEALTH CARE



MassHealth (Medicaid) and Health
Reform


The House and Senate Fiscal Year (FY) 2018 budget proposals
for
MassHealth (Medicaid) and Health Reform do not differ greatly. During
floor debate, the Senate added just $1.5 million to their budget
proposal for these programs, bringing their total funding to $17.42
billion. This is less than one-third of one percent below the House
proposal of $17.47 billion, a $47.2 million difference. For a list of
line items with funding differences that will have to be resolved by
the legislative Conference Committee, see the table below. There are
many language differences between the House and Senate budget
proposals, and the Conference Committee will have to resolve these as
well.



Health Care Cost Containment, Health Coverage, and Employer
Contributions



When the Governor released his budget, he
proposed
a new assessment on
employers based on the share of employees who do not receive a certain
minimum of health insurance coverage from that employer. The
Governor’s assessment would generate $300.0 million for FY
2018. The House also proposed the creation of an employer assessment,
but left most of the details of the assessment to be determined after a
public hearing, and specified that this assessment would be temporary.
The House anticipated their assessment would generate $180.0 million.
Similarly, the Senate budget proposes two choices for a temporary
assessment, also with the expectation that either one of these
alternatives would generate $180.0 million for the FY 2018 budget. One
of the Senate’s options would be for the Secretary of
Administration and Finance (in consultation with several other
agencies) to increase the existing Employer Medical Assistance
Contribution (EMAC) rate. The other option for an assessment as
outlined in the Senate proposal would broadly follow the
Governor’s proposal, but with some details more closely
defined, and some parameters yet to be determined. In the Senate
proposal, private employers who do not provide a minimum level of
health insurance (equivalent to an employer-sponsored group insurance
plan to be determined) for a share of their employees (that share to be
determined) would be assessed a certain amount, based on a variety of
other factors. In particular, that assessment would be
“tiered” based on the size of the employer, with
larger employers presumably paying a larger amount.



There are other initiatives included in the Senate budget (but not in
the House proposal) that are also intended to address health care
coverage and health care costs, although none of these would
necessarily generate budget savings in FY 2018. The Senate budget
proposes that:



  • The Commonwealth Health
    Insurance Connector (“Connector”) establish a
    public awareness campaign to encourage small businesses to use the
    Connector to find affordable health insurance for their employees.
    There is no funding targeted for this.

  • The Connector, together with
    the Office of Medicaid, report on the feasibility of establishing a
    premium sharing plan for small businesses. The intent of this program
    would be so that small employers of people under 138 percent of the
    poverty level would share in the costs of MassHealth coverage for those
    employees.

  • The state create a task force
    to explore group purchasing cooperatives for health insurance.

  • The state create a task force
    to explore savings that could be realized by state agencies using bulk
    purchasing of non-MassHealth prescriptions. Similarly, the Senate
    budget recommends that the Office of Medicaid consider a multistate
    Medicaid bulk purchasing program, also to save on prescription costs.



The House included language requiring the Executive Office, in
conjunction with the Department of Transitional Assistance, to report
to the Legislature by January 1, 2018 on the feasibility of creating a
common application
for MassHealth and for Supplemental Nutrition
Assistance Program (SNAP, or “food stamps”),
Emergency Aid to Elders, Disabled and Children (EAEDC), and
Transitional Assistance to Families with Dependent Children (TAFDC, or
cash assistance). The Senate does not include this language.



On the other hand, the Senate directs the Administration to pursue
federal funding for the development of an integrated electronic
eligibility system between MassHealth and other benefits programs. The
Senate budget further requires that by March 2018, the Administration
publish a plan to implement coordinated enrollment and a common
application for benefits from the Health Insurance Connector,
MassHealth, the Department of Transitional Assistance, the Department
of Early Education and Care, and the Department of Housing and
Community Development.



MassHealth Program and Administration



The Senate adopted amendments adding $1.5 million to MassHealth funding
bringing the total to $16.46 billion, with $16.30 billion for the
MassHealth program, and $162.7 million for program administration. The
House proposal includes $16.35 billion for the MassHealth program and
$163.8 million for program administration, bringing the House total to
$16.51 billion (see table). Although both the House and Senate build
their budgets based on slightly lower MassHealth enrollment assumptions
than the Governor, the Administration assumes that MassHealth
enrollment will stay at around 1.9 – 2.0 million members in
FY 2018.


table: MassHealth (Medicaid) and health reform









The Senate MassHealth budget proposal is less than House totals in
several areas. These are “gross
savings in that
they do not account for reductions to federal reimbursements that would
result from reductions to spending. Since the federal government
reimburses the state for half of spending on MassHealth (or more), the
state would not realize the full amount of savings associated with
these MassHealth budget reductions:



  • The Senate budget does not
    include $14.8 million in supplemental payments to pediatric hospitals;

  • The Senate budget includes a
    provision that would allow optometrists to provide certain services
    that until now could only be provided by ophthalmologists. The Senate
    estimates that this could generate savings of approximately $10.0
    million ($5.0 net of federal revenue);

  • The Senate budget does not
    include an $8.0 million increase in home health care and foster care
    rates that were in the House budget.

  • The Senate budget does not
    include a $15.0 million increase in nursing home rates and $2.8 million
    in performance incentives for nursing homes that were in the House
    proposal.



Other Payments to Providers, Health Subsidies, and Related Spending



The FY 2018 budget proposals also include funding for other
supplemental payments to health safety net providers, funding for other
subsidized health programs, and other administrative and operational
supports (see table.)





table: MassHealth and health reform






The totals for the Medical Assistance Trust show budgeted
appropriations current as of this moment. The timing of operating
transfers into this trust, which are made up of provider assessments
and federal revenues, do not align with the state fiscal year. The
apparent large difference between FY 2017 and FY 2018 is simply due to
the timing of the transfers. There will likely not be a significant
difference in spending from this trust for FY 2018 compared to FY 2017.



Other differences between the Senate and House budget proposals
include: 



  • $5.0 million more in the
    Senate in funding for the Health Information Trust; the Senate proposes
    $13.9 million and the House proposes $8.9 million;

  • $3.0 million in the House
    budget for the Community Hospital Reinvestment Trust, while the Senate
    does not include this funding. The trust receives funds
    (“off-budget”) from the Center on Health
    Information and Analysis to support hospitals that provide health care
    for low-income populations. Both the Senate and House budgets direct an
    additional $17.0 million in payments from the fund to support care that
    was provided by hospitals in FY 2017.





table: MassHealth and health reform line items with funding differences





For information on funding for MassHealth (Medicaid) going
back to FY
2001, please see MassBudget’s Budget Browser here.






Mental Health


The Fiscal Year (FY) 2018 Senate budget proposes funding
mental health
services at $777.1 million, $2.9 million more than the $774.2 million
proposed by the House. During floor debate, the Senate added amendments
totaling $1.5 million for mental health. For a list of line items with
funding differences, see the table below.



One of the differences between the House and Senate mental health
budget proposals is in the funding for

child and adolescent health
services
. The Senate added $200,000 to the funding for this
line item
to fund particular local programs, bringing the total to $91.6 million,
$2.4 million (2.7 percent) more than proposed by the House. Within the
funding for this line item, the Senate budget includes $100,000 more
than the House (for a total of $3.7 million) for the Massachusetts
Child Psychiatry Access Project (MCPAP). The Senate proposal directs
MCPAP to establish a pilot program to increase care coordination for
children with behavioral health needs.



The Senate proposal for forensic
services
is $10.7 million, $1.5
million (16.2 percent) more than the $9.2 million proposed in the
House. The Senate proposal includes in this total $3.5 million
designated for juvenile court clinics, a $600,000 increase over current
funding.





table: Mental health line items with funding differences





For information on funding for Mental Health going back to FY
2001,
please see MassBudget’s Budget
Browser
here.






Public Health


The Fiscal Year (FY) 2018 Senate budget includes $622.6
million for
public health programs, just under the $623.4 million proposed by the
House. During floor debate, the Senate added $6.0 million to their
proposal, which brought the Senate funding level close to the House
total. Even so, there are many line items with funding differences that
will have to be resolved by the budget Conference Committee. See table
below for a list of line items with funding differences. Much of the
funding added to the Senate budget during debate would provide targeted
support for specific local public health programs, such as violence
prevention and youth engagement programs, community health center
programs, substance abuse programs, or health promotion and prevention
programs.



Some of the more significant differences between the House and Senate
public health budget proposals are:




The House includes budget language in an Outside Section (74C) that
would establish a special commission to study and report on childhood
vision and eye health,
but the Senate budget does not
include this
language.


There is a new provision in the Senate budget that would
increase the
tax on flavored cigars in order to provide $7.0 million in ongoing
revenue for the (off-budget) Prevention and Wellness Trust Fund. The
Fund supports partnerships among community organizations, health
providers, and local governments to promote healthier living. Projects
funded by the Trust are intended to help communities reduce health
disparities, reduce preventable health conditions, and increase healthy
behaviors among their residents.





table: Public health line items with funding differences





For information on funding for all public health programs
going back to FY 2001, please see MassBudget’s Budget Browser
here.






State Employee Health Insurance


The Fiscal Year (FY) 2018 budget proposals from the House and
the
Senate for state employee health insurance are essentially the same at
$1.61 billion, with only small funding differences in a few line items
(see table), so there will be little to resolve in the Conference
Committee. The Senate did not pass any amendments to state employee
health insurance during floor debate.


table: State employee health insurance line items with funding differences





Please note that MassBudget’s totals for state
employee
health insurance include adjustments that allow for better across-year
comparisons (see table). MassBudget removes from budget totals the
amounts each year that are simply pass-throughs of funding for
municipal health insurance. Municipalities have the option of taking
advantage of the state’s purchasing power by using the
state’s Group Insurance Commission (GIC) to purchase their
employees’ health insurance. Municipalities reimburse the
state for the costs of this insurance, so there is no cost to the state
for adding these municipal employees to the GIC membership rolls.





table: State employee health insurance line item adjustments





State Retiree Benefits



The state has adopted a schedule to move towards full funding of health
and other non-pension post-employment benefits
(“OPEB”) for retirees. The Commonwealth funds the
current and future costs of OPEB through a variety of transfers to the
State Retiree Benefits Trust
. The House budget proposal
includes $440.0
million in an operating transfer directed to the State Retiree Benefits
Trust, and the Senate proposal includes a slightly larger transfer of
$440.6 million. In order to fully fund the cost of future
retirees’ benefits, in FY 2012 the state decided to dedicate
an increasing share of its annual Master Tobacco Settlement award to
the State Retiree Benefits Trust. The intent was to use 60 percent of
the award in FY 2018, which would be $154.5 million.



However, instead of transferring $154.5 million (or 60 percent), both
the House and Senate propose transferring an amount equivalent to just
10 percent of the Tobacco Settlement award—$25.8
million—into the State Retiree Benefits Trust to fund OPEB.
Language in the budget proposals state that this transfer would come
from unexpended debt payments reverted to the General Fund or, if those
reversions are insufficient, from the Master Tobacco Settlement money
deposited into the General Fund. This total is $128.8 million less than
the amount indicated for FY 2018 in the statute.



The House budget allows for this transfer to come from unexpended debt
service appropriations that are paid from the Commonwealth
Transportation Fund (see the “Transportation”
section of this Budget
Monitor
), but the Senate budget restricts these
transfers to debt service paid out of the General Fund.



In FY 2017, the General Appropriation Act included similar language
that would have funded the State Retiree Benefits Trust with either
debt reversions or funds from the Tobacco Settlement, and also at 10
percent of the Tobacco Settlement—an amount lower than
specified in the statute. However, the Governor vetoed this language in
the budget, and proposed alternate language. The Governor expressed
concern that funding the Trust at a level of only 10 percent of the
Tobacco Settlement was risky for the state’s bond rating. The
Legislature has not yet moved forward on the Governor’s
alternate language which would have increased the transfer to 30
percent. Since there has not yet been alternate language enacted to the
statute for FY 2017, the transfer into the fund for FY 2017 reverts to
the amount currently in statute—50 percent—until
otherwise amended. Although it is certainly likely that the Legislature
will act on this transfer before the end of FY 2017, and in fact is
currently considering legislation that would fund the State Retiree
Benefits Trust for FY 2017 at the level of 10 percent of the Tobacco
Settlement, the numbers in
this Budget Monitor
reflect the current status of FY 2017 funding, an
amount that is $103.0 million more than the amount proposed by the
Legislature for FY 2017, and $51.5 million more than had been proposed
by the Governor.



For information on funding for State Employee Health Insurance going
back to FY 2001, please see MassBudget’s Budget Browser
here.






HUMAN SERVICES



Child Welfare


The Senate’s Fiscal Year (FY) 2018 budget proposal
for child
welfare services is $988.4 million, $13.0 million (1.3 percent) more
than the $975.4 million from the House. During floor debate, the Senate
added an additional $1.1 million to the appropriation for
Services
for
Children and Families
, with the added money going to support
specific
local programs, bringing the total to $292.5 million, just slightly
over the amount proposed by the House. See table below for a list of
line items with funding differences that will need to be resolved
during Conference Committee deliberations.



The largest funding difference is due to the Senate’s
proposal to continue funding for the Department of Children and
Families (DCF) “lead
agencies.
”  These are
local and regional offices that contract for child welfare services
throughout the Commonwealth. The Senate proposed $6.0 million for these
agencies, while the House did not include this funding.


The Senate proposes more funding than the House for
community-based
supports for families. The vast majority of children connected to DCF
are not in foster care, but rather live with their families with
supports and services provided by, or coordinated with, DCF. The House
proposed $47.4 million for Family
Support and Stabilization
, while the
Senate proposed $50.0 million. The Senate proposed $12.2 million for
Family
Resource Centers
, $4.4 million more than the House proposal
of
$7.8 million. The Senate total includes new funding ($50,000) for the
Juvenile Court Mental Health Advocacy Project, a program to increase
access to mental health services for at-risk youth diverted from
juvenile courts. The Senate also includes $1.0 million for Family
Resource Centers in the Executive Office of Health and Human Services
(see the “Other Human Services” section of this
Budget Monitor)
.



The Senate proposed $275,000 to support Foster
Care Parent Outreach
, an
initiative to encourage more families to open their homes to foster
children. This is $25,000 more than proposed by the House. Unlike the
House, however, the Senate does not fund what is known as the
Grandparents
Commission
, which focuses on concerns of grandparents with
primary responsibility for raising grandchildren. The House proposed
$112,000.





table: Child welfare line items with funding differences





For information on funding for Child Welfare programs going
back to FY
2001, please see MassBudget’s Budget Browser here.






Disability Services


The state budget supports a range of programs for individuals
with
disabilities, including targeted job training programs that help people
participate in the workforce as well as community-based supports to
assist people and their families more broadly. During its budget
debate, the Senate provided $380,000 in additional funding to
disability services above the Senate Ways and Means Committee budget.
In total, the House and the Senate for Fiscal Year (FY) 2018 both
propose $1.98 billion for programs for individuals with disabilities.
These budget proposals are about 4 percent over the FY 2017 current
budget.



Unlike the House, the Senate proposes to fund the Aging with
Developmental Disabilities
program and
Transitions
to Work
, each at
$150,000 for FY 2018. The Aging with Developmental Disabilities program
provides direct support for older adults with developmental
disabilities, staff training for identifying age-related conditions,
and data collection on the effectiveness of support and training.
Transitions to Work provides a range of job training and placement
services to young adults with disabilities.



The Senate and House proposals are in line with each other with the
exception of modest differences. For a full list of these funding
differences that will be settled in a House/Senate Conference
Committee, see the table below.


table: Disability services line items with funding differences









Elder Srevices


The state budget supports older adults in Massachusetts
through a range
of services that promote independence, safety, and well-being. The
House and the Senate propose similar levels of Fiscal Year (FY) 2018
funding for elder services. The House budget proposal provides $287.8
million, while the Senate proposal provides $288.3 million, which
includes $172,000 added during Senate floor debates.



The major difference between the House and Senate proposals is $1.2
million more that the Senate would provide for Elder Home Care
Purchased Services
. This additional funding is dedicated
for new elder
applicants of the home care over-income cost-sharing program, which
expands eligibility for home care services to applicants whose adjusted
incomes are just above the income cutoff. The Senate also proposes
studying the cost-effectiveness of the home care program, including the
over-income cost-sharing program. The FY 2017 budget required that the
Executive Office of Elder Affairs prepare a plan for expanding income
eligibility for elders. The Senate’s funding would
accommodate the projected enrollments for this program for FY 2018.





table: Elder services line items with funding differences





For information on funding for all elder services programs
going back to FY 2001, please see MassBudget’s Budget Browser
here.






Juvenile Justice


The House and the Senate propose similar levels of Fiscal Year
(FY)
2018 funding to juvenile justice programs, which are run by the
Department of Youth Services (DYS). The House budget proposal provides
$182.0 million, while the Senate proposal provides $182.7 million,
which includes $500,000 added during Senate floor debates.



A major difference between the House and Senate proposals is an
additional $500,000 that the Senate would dedicate for a
Detention
Diversion Advocacy Program
in the Residential
Services for Detained
Population
account. This program aims to prevent young people
entering
the court system from advancing further into the juvenile justice.



The Senate also proposes $149,000 more than the House proposed for the
Non-Residential
Services for Committed Population
account, which funds
programs and services to youths in DYS custody who reside in the
community.





table: Juvenile justice program line items with funding differences





For information on funding for all juvenile justice programs
going back
to FY 2001, please see MassBudget’s Budget Browser here.






Transitional Assistance


Transitional assistance programs help low-income individuals
and
families meet their basic needs and improve their quality of life when
faced with an emergency. During its budget debate, the Senate provided
$1.4 million in additional funding to transitional assistance programs
above the Senate Ways and Means Committee budget. In total, the Senate
proposal provides $635.3 million, which is $9.0 million or 1.4 percent
above the House proposal.



The Senate proposes funding Transitional
Assistance for Families with
Dependent Children
(TAFDC) at $166.7 million, $5.8 million
above the
House budget proposal. Both proposals for TAFDC are below current 2017
spending – by $24.5 million in the Senate and by $30.2 million in the
House. The decreases assume a drop in caseloads, which one would expect
with an improving economy that enables more people to secure employment
and improve their circumstances rather than seek this assistance.
However, current caseload reduction may partially result from new
administrative changes that make it harder for clients to maintain
their benefits.



The Senate budget proposes increasing the back-to-school clothing
allowance
available to TAFDC recipients from $250 to $300,
which is
$100 more than the House proposal. The rent allowance remains at $40
per month in both budget proposals.



For food assistance programs, the Senate proposes funding
Supplemental
Nutrition Assistance Program
(SNAP) Administration at $4.4
million,
$1.4 million above the House proposal. This account funds programs
designed to increase the participation of residents eligible, but not
currently signed up, to receive SNAP (formerly Food Stamps). Also, the
Senate proposes to fund the Supplemental
Nutrition Program
, which
supplements the federal SNAP program, at $1.2 million, which is
$900,000 above the House proposal.



Finally, the Senate proposes to fund the Employment
Services Program
at
$14.7 million. This is $1.0 million above the House proposal and $2.1
million above current FY 2017 levels.



For a full list of all funding differences between the two budgets that
will be settled in a House/Senate Conference Committee, see the table
below.   


table: Transitional assistance line items with funding differences








For information on funding for all transitional assistance
programs
going back to FY 2001, please see MassBudget’s Budget Browser
here.






Other Human Services


The Senate budget proposal for Fiscal Year (FY) 2018 includes
$207.7
million for other human services, just $1.7 million more than the House
proposal. This funding includes allocations for veterans’
services, food banks, and some cross-agency initiatives. During floor
debate, the Senate added a total of $1.6 million for other human
services. For a list of the specific line items with funding
differences between the two proposals that will need to be resolved in
the Conference Committee, see the table below.



The Senate budget includes $500,000 for the Citizenship for New
Americans Program
in the Office for Refugees and
Immigrants, $100,000
more than the House proposal. This program assists legal permanent
residents in becoming citizens.



The Senate proposed $1.0 million to support the

Family Resource Centers

through the Executive Office of Health and Human Services. These
centers work in conjunction with resource centers funded through the
Department of Children and Families (see “Child
Welfare” section of this Budget Monitor) and are intended to
help at-risk children and families. The House did not include any
funding for these centers in the Executive Office and they are not
funded in the FY 2017 budget. 



During floor debate, the Senate added $1.1 million to the Emergency
Food Assistance Program,
bringing the total to $17.6 million,
which is
$85,000 less than proposed by the House because a particular food
assistance program funded in the House budget is included in the Senate
budget in the funding for state parks.



The Senate budget included a total of $147.2 million for
veterans’ services
, including an addition of
$459,000 in
amendments to support particular local programs. This total is
essentially level with the amount proposed by the House. Included in
the Senate proposal is a new allocation of $100,000 to support the
administration of a tax credit to encourage businesses to hire and
retain veterans.





table: Other human services line items with funding differences






For information on funding for Other Human Services programs going back
to FY 2001, please see MassBudget’s Budget Browser here.






INFRASTRUCTURE, HOUSING
& ECONOMIC DEVELOPMENT



Transportation


The state supports an array of transportation systems,
including roads,
bridges, rail, buses, airports, and ferries that enable people and
goods to travel where they need to go. Much state funding for
transportation takes place through dedicated revenue sources and a
separate capital budget process. For a chart and description of funding
for transportation operations and debt service, see
MassBudget’s fact sheet,
“What
Does Massachusetts
Transportation Funding Support and What Are the Revenue
Sources.”



The House and Senate budget proposals for Fiscal Year (FY) 2018 differ
little in the levels of spending they would allocate for particular
programs, but propose a largely different set of policy measures and
studies for the Department of Transportation and the Massachusetts Bay
Transportation Authority.



The Senate proposes $83.0 million for the state’s 15 Regional
Transit Authorities
(RTAs), which would be an increase of
$1.0 million,
though still below the anticipated rate of inflation. The amount is
$2.0 million more than proposed by the House. The Senate –
but not the House – proposes to target $250,000 to the
Montachusett regional transit authority for the so-called
“Athol-Orange shuttle.”



Both the House and Senate follow the Governor’s proposal to
reduce Massachusetts Bay
Transportation Authority
(MBTA) operating
assistance to $127.0 million, a reduction of $60.0 million compared to
the FY 2017 budget, with an expectation of an increase in capital
funding of the same amount. Anticipating this shift, the Department of
Transportation’s draft capital plan last month included $60.0
million in the state bond cap allocation
that had not been in the
earlier draft. This allocation would be for “Supplemental
capital funding for state of good repair and modernization projects
across the system including signal upgrades and station
improvements.” Unlike the House, the Senate proposal includes
language to require the MBTA to provide quarterly reports accounting
for how future operating assistance funds are spent, as well as
requiring the authority to report the level of funding they expect to
request through 2021. The proposal also stipulates that the MBTA would
be required to include this funding in their future presentations of
the structural deficit – instead of presenting a structural
deficit that omitted this funding.



The Massachusetts
Transportation Trust Fund
(MTTF) contributes to
highways, transit, intercity rail, small airports, the Massachusetts
Turnpike, and the Motor Vehicle Registry. The MTTF receives funds from
tolls and federal transportation sources as well as a transfer from the
Commonwealth Transportation Fund. The Senate would decrease the
anticipated transfer from the Commonwealth Transportation Fund to the
MTTF to $315.2 million, a $13.9 million decline compared to the current
FY 2017 budget and $9.6 million less than proposed by the House. The
Senate decrease is due to $30.0 million less provided for addressing
ice and snow costs. If snow and ice removal costs eventually exceed the
Legislature’s allotment next winter, additional funds will
need to be appropriated in a supplementary budget. The House proposes
to fund a list of specific local projects that includes several local
traffic improvements, a commuter shuttle, and a walking path. The
Senate identifies its own list of $880,000 in local projects that
include repair of a bridge, replacing a local culvert, and various
local sidewalk and traffic improvements. The only common item
identified by both chambers is senior van service in Maynard and Acton.



Like the budgets by the House and Governor, the Senate proposal also
assumes increased transportation funding through measures that would
add to sales tax revenues available in FY 2018, and thereby increase
the dedicated portion of those sales taxes to the MBTA. These changes
are described in the “Revenue and Budget Balance”
section of this Budget
Monitor
. With these changes and a growing
economy, the Senate joins the Governor’s and House budgets in
anticipating that sales tax revenues will increase enough to yield
$1.02 billion in dedicated sales tax revenue for the MBTA, an increase
of $23.7 million over the current FY 2017 amount.





table: Transportation line items with funding differences





In addition to proposed spending through particular line
items, the
Senate approved a set of studies, commissions, and other policy
amendments that do not appear in the House budget proposal. These
included:



  • Needs/revenue
    assessment study

    – Would require the Secretary of Transportation to prepare a
    report to analyze and assess current capacity constraints, safety
    conditions and the state of good repair of the Commonwealth’s
    surface transportation system, and to consider the baseline of revenues
    available through fiscal year 2028, with recommendations for new
    sources.

  • Updated
    tolling study
    – Would require the Massachusetts
    Department of
    Transportation to update the 2013 comprehensive tolling plan, taking
    into consideration potential changes to federal rules, electronic
    tolling, regional toll equity; and the feasibility of placing tolls on
    the state borders, mileage-based user fees, congestion pricing; and
    dynamic pricing.

  • Pittsfield-New
    York City
    seasonal rail study
    – Would require the
    Department of
    Transportation to convene a working group to evaluate establishing
    direct seasonal weekend passenger rail service between New York City
    and Pittsfield between Memorial Day and Columbus Day weekends modeled
    on the CapeFLYER passenger rail.

  • Stipulations
    on a North-South
    Rail Link study
    – Would require that any study
    conducted by
    the Department of Transportation on the proposed North South Rail Link
    assess certain technological options, an updated ridership model,
    quantification of several kinds of potential benefits – while
    requiring an independent peer review when the study is 25 percent
    complete.

  • Springfield-Boston
    high-speed
    rail study
    – Would require the Massachusetts
    Department of
    Transportation to conduct a study on the feasibility of high-speed rail
    between Springfield and Boston.

  • MBTA pension
    fund
    sustainability commission
    – Would create a
    commission to
    recommend ways to increase the sustainability of the MBTA pension fund
    to ensure payment of future pension obligations. 

  • MBTA
    privatization procedures

    – Would require good-faith labor negotiations before
    outsourcing core transportation service or maintenance
    functions.   

  • Safeguards
    against EZ pass
    fines amassing without driver knowledge
    – Would
    require the
    Department of Transportation to contact holders of EZ pass accounts
    with more than $100 in outstanding fees and fines amassed on unpaid
    tolls. 

  • Westfield-Lee
    interchange
    study
    – Would require the department to conduct
    a feasibility
    study on establishing a highway interchange on Interstate 90 between
    the existing interchanges located in the towns of Westfield and
    Lee. 


Likewise, the House approved policy measures and a study that
does not
appear in the Senate proposal. These include:



  • Local
    “value
    capture” local revenue option
    – Would
    allow a
    municipality or a group of municipalities to help fund a new
    transportation project by leveraging some of the increase in property
    values that can result from a transportation improvement nearby, such
    as a new train station or repaired on-ramp. Localities would designate
    a special district around a proposed transportation project undertaken
    by the MBTA, a regional transit authority, or the Massachusetts
    Department of Transportation, and then use the additional property tax
    revenue generated within the district as a result of the project to
    provide some funding for the project.

  • Annual report
    on use of
    employee salaries as capital expenditures

    Would require the
    Department of Transportation to annually report on how much capital
    expenditures are used to match federal projects, a detailing of
    departmental employee salaries included in capital expenditures, and
    the impact of including these salaries as capital expenditures.



Both the House and Senate include a few common proposals, which also
parallel proposals from the Governor. One proposal would increase the
value of real estate that the Massachusetts Department of
Transportation is allowed to sell without a competitive bidding
process. Currently, the Department can sell real estate without a
competitive bidding process only if the value is less than $5,000. The
House would raise this threshold to $100,000 and the Senate at $50,000.
Similarly, both chambers, like the Governor, propose to enable, but not
require, the Pension Reserves Investment Management Board to manage the
investment of the MBTA Retirement Fund, if the MBTA agrees.






Housing


Our state budget supports affordable housing programs and
provides shelter and services to low-income homeless families and
individuals. During its budget debate, the Senate added $1.4 million to
housing programs for a total of $468.3 million in Fiscal Year (FY)
2018. The Senate’s final budget is $16.4 million more than
the budget approved by the House. The difference between the two
budgets, discussed in more detail below, is largely because the Senate
provides more funding to the Emergency Assistance shelter program for
low-income homeless families. Please see the chart at the end of this
section for a list of all differences in housing funding that will have
to be settled by the House/Senate Conference Committee. 



The

Emergency Assistance
(EA) program provides shelter and
assistance
to low-income families who are homeless. The Senate provides EA with
$166.1 million which is $10.2 million more than the House. Because EA
provides shelter to low-income families who qualify, the state is
obligated to provide sufficient funding to meet demand. In recent
years, the final budgets have underfunded this account, requiring the
Legislature to provide supplemental funding over the course of the
fiscal year. This year the Senate budget appears to provide adequate
funding to meet projected caseloads in FY 2018. In its budget, the
Senate also includes language that requires EA to provide assistance to
families who, without shelter, would have to live in a places not fit
for human habitation, like an emergency room, car, or public park. The
House budget does not include this language.



A number of other notable differences between the House and Senate
budgets include:



  • The House funds two new
    programs not included in the Senate final budget. The House budget
    includes $500,000 for the Secure
    Jobs Connect
    program that helps adults
    living in EA shelters to connect to full-time jobs. The House budget
    also provides $250,000 for the New
    Lease Program
    , which matches
    homeless families, living in hotels and motels, with housing and
    provides support services to help these families remain
    housed. 

  • The Senate provides $32.6
    million, which is $1.5 million more than the House, for the HomeBASE
    program, which helps families living in EA shelter to move into housing
    or to help families avoid homelessness altogether. The Senate budget
    also recommends increasing the amount of assistance a family can
    receive to $10,000 each year. Current law and the House budget provide
    families with up to $8,000 each year.  

  • The House provides $65.5
    million for
    public housing authorities
    which is $1.0 million more than
    the Senate. Besides the Massachusetts Rental Voucher Program, discussed
    below, public housing is an important way the state can provide
    permanent housing to very low-income families.

  • The Senate provides Residential
    Assistance for Families in Transition
    (RAFT) with $18.5
    million, which is $3.5 million more than the House. RAFT currently
    provides funding to help low-income families who might not be eligible
    for EA shelter or assistance through HomeBASE and who are at risk of
    becoming homeless, to remain housed. The Senate budget also includes a
    provision, not in the House budget, that would provide $2.0 million of
    these funds to expand assistance to elders, persons with disabilities,
    and unaccompanied youth.

  • The Senate provides $2.5
    million for a program that provides shelter and services to
    unaccompanied homeless youth
    up to age 25 who are not in the
    care of a
    parent or a guardian. This amount is $2.0 million more than the House
    budget.



Both the House and the Senate budgets provide a significant increase
(15.6 percent) in funding for the Massachusetts
Rental Voucher Program

(MRVP), one of the two most important programs that provide long-term,
affordable housing to very low-income families, including those moving
out of EA shelters. Both budgets recommend providing MRVP with $100.0
million, which is $13.5 million more than the current year’s
budget and $2.5 million more than the amount the Governor proposed in
his FY 2018 budget. Both chambers estimate that this will allow the
state to create 350-400 new vouchers in FY 2018. The House and Senate
also adopted language included in the Governor’s budget that
allows renters to keep their MRVP vouchers until their income exceeds
80 percent of Area Median Income (AMI). Under current law, renters must
give up their vouchers once their income exceeds 50 percent of AMI.
This income level is often not sufficient to allow renters to afford
market-based rents in areas with high housing costs, like Greater
Boston. The two budgets also allow the Department of Housing and
Community Development (DHCD) to target up to three quarters of the new
vouchers for very low-income renters earning 30 percent of the Area
Median Income.



For information on funding for Housing programs going back to FY 2001,
please see MassBudget’s Budget
Browser

here.   





 table: Housing line items with funding differences






Economic Development


Economic development programs aim to strengthen our
state’s
workforce, support community investments, and stimulate economic
activity. During its budget debate, the Senate provided $7.9 million in
additional funding to economic development above the Senate Ways and
Means Committee budget. In total, the Senate proposal provides $145.8
million, which is $179,000 below the House proposal. Both proposals are
about 15 percent above FY 2017 current spending.



Unlike the House, the Senate does not seek renewed investment to the
Big Data Innovation and
Workforce Fund
and the Massachusetts
Manufacturing Extension Partnership
(MassMEP). The House
proposes
funding these programs at $2.0 million each. The Administration
eliminated funding for them during emergency budget reductions in
December. (To learn more about such cuts, read MassBudget’s
brief,
What
Are 9C Cuts?
). The Big Data Innovation and Workforce Fund
brings the public and private sectors together to prepare workers for
big data careers and help identify and solve technology-based issues in
transportation, public health, energy, and other areas. MassMEP, also a
collaboration of government, business, and academic partners, helps
manufacturers in the state plan and implement strategies for increased
competitiveness.



Conversely, unlike the Senate, the House does not seek to fund the
Re-Entry
Demonstration Workforce Development Program,
which provides
workforce development and supportive services to individuals
transitioning from a correctional facility. The Senate proposes funding
the program at $400,000.



For other workforce development programs, Senate proposes funding Learn
to Earn
at $1.0 million, which is $750,000 above the House
proposal.
This program was introduced in the Governor’s budget proposal
and aims to train and place unemployed and underemployed individuals in
jobs in high-demand fields through partnerships between public
agencies, businesses, community-based organizations, and career
centers. Also, the Senate proposes funding YouthWorks,
the summer jobs
program for at-risk youth, at $12.5 million, $1.8 million above the
House and $2.5 million above current FY 2017 spending.



For the arts, the Senate proposes to fund the Mass Cultural
Council
at
$16.5 million, which is $4.5 above the House proposal. Also, the Senate
seeks to establish a Mass.
Public Art Program
(MPAP), which would
provide for the creation, acquisition, conservation and maintenance of
public art. Funding for construction and renovation of this program
would come from 1 percent of all state fund appropriations for capital
improvements. It also creates a Public
Art Commission
, which would
administer the MPAP and establish a process for the projects.



For travel and tourism, the Senate added $3.8 million in amendments to
the Mass. Office of
Travel and Tourism
(MOTT) bringing funding to $8.1
million, which is $2.6 million below the House proposal. For the
Regional Tourism Council
Grants
, the Senate seeks to distribute funds
from the Tourism Trust Fund to the regional tourism councils by
September 1 of each fiscal year as well as to require an annual report
of its cost-effectiveness. Both Senate and House propose to
fund regional tourism councils at $6.0 million.



Finally, the Senate seeks to create a Special Commission Relative to
the Modernization of the Taxi Cab Industry in Massachusetts
,
which
would study the current industry climate of the
Commonwealth’s taxi cab industry, such as rules and
regulations, industry viability, competitive issues facing the
industry, financial burden, cost and financing of medallions and
vehicle related issues.



For a full list of all funding differences between the two budgets that
will be settled in a House/Senate Conference Committee, see the table
below.


table: Economic development line items with funding differences








For information on funding for economic development programs
going back
to FY 2001, please see MassBudget’s Budget Browser here.






LAW & PUBLIC SAFETY


Overall, funding levels provided by the Senate and the House
for Fiscal Year (FY) 2018 for Law and Public Safety programs are very
close—the Senate’s total budget of $2.77 billion is
$27.9 million (1.0 percent) higher than the House’s proposal
and $54.3 million (2.0 percent) higher than current FY 2017 spending
levels. Most of the differences between the House and Senate proposals
are explained by the Senate more fully funding county sheriff
departments and related accounts. Overall, there are roughly
seventy-five Law & Public Safety accounts funded at different
levels in the Senate and House budgets. For a list of the specific line
items with funding differences between the two proposals that will need
to be resolved in the Conference Committee, see the tables below.


In the area of Prisons, Probation & Parole, the Senate
provides
$21.5 million more than the House budget proposal. A majority of the
proposed increases in this budget area go to specific county
sheriff’s departments
. Also, both the House and
the Senate
provide a sizeable increase to the Department
of Corrections
(DOC), as
compared to FY 2017 current spending. Some of this increase is tied to
the monitoring of recent significant

reforms
made at the Bridgewater
State Hospital
, a medium-security prison and mental health
facility.





table: Prison, probation and parole line items with funding differences






In the area of Courts & Legal Assistance, the Senate provides a
net of $10.0 million more than the House. The main differences include
more robust proposed funding for the Indigent Persons Fees and Courts
account, with the Senate providing $5.2 million more than the House,
though the Senate’s funding level remains below the current
FY 2017 spending levels. There is also $3.5 million allocated for the
implementation of the recommendations set forth by the Council of State
Governments Criminal Justice Review
, including the
establishment of new
programs and expansion of existing programs targeted at recidivism
reduction. The Senate budget, unlike the House’s FY 2018
proposal, recommends providing $1.0 million to expand the housing court
system
to cover all regions of the state.


table: Courts and legal assistance line items with funding differences



In the area of Law Enforcement, the House and Senate provide
nearly identical overall levels of funding, though there are several
differences at the line-item level. The Senate provides $7.0 million
(or $1.0 million more than the House) for the Shannon
Grant Gang
Prevention Program.
The Senate also provides $3.6 million
less than the
House to support the Department
of State Police
as well as the hiring
and training of new
state police recruits.



table: Law enforcement line items with funding differences









The House provides $3.1 million more for Prosecutors than does the
Senate. The most notable difference is the Senate proposing less
funding than the House for District
Attorneys’ offices
around
the state. Under the Senate’s proposal, most offices would
receive around 3 percent less funding than proposed by the House,
though the Senate levels are still above current FY 2017 spending. The
Senate also sets aside $200,000 to establish a Victims of Human
Trafficking Trust Fund.





table: Prosecutors line items with funding differences






In other areas of Law & Public Safety, the House provides $1.0
million for the Boston
Regional Intelligence Center
(BRIC), an
operation located within the Boston Police Department and funded in
part by the U.S. Department of Homeland Security, while the
Senate
provides no funding for this item. The Senate does provide $2.2 million
more for the Department
of Fire Services
than the House for FY 2018.





table: Other law and public safety line items with funding differences



The Senate also approved an amendment to eliminate fees that people
released from prison onto parole are currently charged to defray the
cost of administering parole. The Senate projects that eliminating
these fees will forgo $600,000 in lost revenue that would have been
generated if these fees were continued.


For information on funding for law and public safety programs
going
back to FY 2001, please see MassBudget’s Budget Browser
here.






LOCAL AID


Unrestricted Local Aid


General local aid helps cities and towns fund vital local
services such
as police and fire protection, parks, and public works. For more
information on general local aid, please see
Demystifying
General Local
Aid in Massachusetts.


Both the House and Senate propose $1.06 billion for Unrestricted
General Government Local Aid
for the Fiscal Year (FY) 2018
budget.
These proposals to Unrestricted General Government Local Aid (also
known UGGA or “general local aid”) match the
Governor’s proposal and would be an increase of $39.9 million
over current FY 2017 levels, an increase of 3.9 percent.


The Commonwealth’s capacity to fund general local
aid has
been hindered by a series of significant state-level tax cuts during
the 1990’s and 2000’s combined with the Great Recession. While over the
past several years, general local aid funding has increased in step
with or slightly above inflation, it still remains 40.5 percent below
FY 2001 levels, when adjusted for inflation.





bar graph: General local aid






Outside sections of the Senate budget are also relevant to general
local aid. One proposal would require the Office of the Comptroller and
the Department of Revenue to provide more extensive information to
municipalities on all forms of financial assistance provided by the
Commonwealth to cities and towns. An amendment  approved by
the Senate also would create a commission to study the distribution of
general local aid and lottery aid and to make recommendations for more
equitable distribution.



Other Local Aid


The Commonwealth provides other sources of local aid to cities
and
towns for more specific purposes. The largest form of local aid is for
K-12 education, which is discussed separately in the K-12 Education
section. Aid for libraries is also discussed in its own section in this
Budget Monitor.


Senate amendments added $650,000 to the Municipal Regionalization and
Efficiencies Incentive Reserve,
bringing the proposed
total to $4.0
million. This amount is approximately half the $8.1 million proposed by
the House, and $2.2 million below current FY 2017 spending levels. Most
funding in the Senate proposal would be dedicated to a competitive
public safety grants program for populous communities with low
per-capita police funding, with the remainder to targeted local
projects. Senate amendments added local projects for a community
pavilion, an outdoor park, reconstruction of a regional facility, a
snow removal plow, and education and outreach for an opioid task force
pilot project. 


Each legislative chamber proposed a different approach to
buttressing
funding for the Community
Preservation Act (CPA) Trust Fund.
The CPA
Trust Fund provides state matching funds to municipalities that vote to
introduce a targeted property tax increment that funds their own local
account dedicated to preserving open space, restoring historical
buildings, creating affordable housing, or developing outdoor
recreation facilities. State Registry of Deeds filing fees fund the CPA
Trust Fund. During the first years of the CPA, the state fund matched
100 percent of the revenue municipalities raised themselves, but that
portion has fallen sharply in recent years. The fund may face
additional strains because eleven new municipalities, including Boston,
voted in November to adopt the CPA. The Senate adopted an amendment to
more than double the Registry of Deeds fee, which supports the Fund
from $20 to $45. The House included language to provide the Community
Preservation Act (CPA) Trust Fund with up to $10.0 million in state
surplus at the end of FY 2017, if any consolidated net surplus occurs.
This possible surplus would otherwise be transferred to the
Commonwealth Stabilization Fund.





table: Local aid line items with funding differences





For information on funding for all local aid items going back
to FY
2001, see MassBudget’s Budget
Browser
, here.






OTHER



Libraries


The state budget supports public libraries and library
programs in
communities throughout the state. During its budget debate, the Senate
did not provide additional funding to library programs above the Senate
Ways and Means Committee budget. The Senate proposes spending $26.7
million on library programs, which is about in line with the House
budget and $1.5 million more than the FY 2017 current budget. Even with
this slight increase, library funding has been cut by about 45 percent
since FY 2001, after adjusting for inflation. For a full discussion of
library funding, please see MassBudget’s Budget Monitor on
the Senate Ways and Means budget
here.



The differences in funding between the House and Senate budgets that
will have to be settled by the House/Senate Conference Committee are
listed in the table below. For a full listing of all library programs
going back to FY 2001, please see MassBudget’s Budget Browser
here.


table: Libraries line items with funding differences






Pensions


The Senate budget follows the House (and Governor’s)
recommended increase in the state’s contribution to the
Pensions Reserves Investment Trust (PRIT) Fund, raising the annual
contribution by $196.4 million over Fiscal Year (FY) 2017, to a total
of $2.39 billion. Based on the recent update by the Secretary of
Administration and Finance to the state’s five-year pension
contribution schedule, the Senate budget also specifies the increased
contribution amounts to be made in FY 2019 and FY 2020. (To read more
about how PRIT contributions are calculated and about the current
schedule for paying down the state’s unfunded pension
liabilities, see MassBudget’s, “
Analyzing
the
Governor’s Budget for FY 2018.


Assets held and managed within the PRIT are used to fund
future state
employee retirement costs. The funds in the PRIT come from three
sources: employee pension contributions, the state’s
contributions toward employee pensions, and the investment returns
generated from the PRIT. To learn more about the Massachusetts state
pension system in general, see MassBudget’s report
“Demystifying
the State Pension System.



For information on funding for all pension items going back to FY 2001,
see MassBudget’s Budget
Browser,

here.






Other Administrative


In its Fiscal Year (FY) 2018 budget, the Senate anticipates
generating $50.0 million in administrative savings, an amount built
into their budget numbers. In order to achieve these savings, the
Senate budget would create a salary bonus program for certain state
employees, aimed at soliciting ideas that would result in
“demonstrable cost savings for the Commonwealth and
enhance(d) government services.” The savings must result from
administrative or operational efficiencies rather than through the
elimination of jobs or other personnel reductions. Employees who offer
successful suggestions will receive “a percentage of
demonstrable cost-savings produced, not to exceed $10,000 per
recipient.” Suggestions must be submitted not later than
March 1, 2018.



For a full list of all funding differences between the two budgets that
will be settled in a House/Senate Conference Committee, see the table
below.





table: Other administrative line items with funding differences






Additional Line Item Differences


In addition to the spending accounts discussed above in the
Budget
Monitor
, the House and Senate Conference Committee will
also need to
reconcile spending differences detailed in the tables below. These
tables are organized in the following MassBudget subcategories:
Commercial &
Regulatory Entities, Constitutional Offices, and
Executive & Legislative. 


table: Commercial and regulatory entities line items with funding differences





table: Constitutional offices line items with funding differences





table: Executive and legislative line items with funding differences






REVENUE


The revenue provisions of the House and Senate budget proposals are
similar overall, with each relying on a variety of temporary measures
that will not be available for future budgets. Both the House and
Senate follow the Governor in relying on $125 million in one-time
revenue from moving forward remittance of sales tax and room-occupancy
tax payments that would have otherwise occurred in the next fiscal
year. Both also both rely on $59 million in net additional tax revenue,
largely from measures to improve compliance. The Senate budget relies
on an additional $46 million in ongoing annual revenue from additional
tax modernization measures, a tightening of rules on the Film Tax
Credit, and higher taxes on flavored cigars.



The most significant non-tax revenue proposal in both the House and
Senate budgets is a temporary $180 million assessment on employers to
help address a shift from employer-sponsored health insurance to
MassHealth (Medicaid). The details of this assessment are different in
the two proposals, and will have to be resolved in during legislative
Conference Committee deliberations. The Governor had also proposed a
new employer assessment, although the Governor’s proposal
would have been permanent, and was estimated to generate $300 million
in revenue for Fiscal Year (FY) 2018.



The House and Senate budgets save money by underfunding accounts that
will likely require supplementary funding later in the year, by
providing less to the state’s Stabilization Fund than was
required by prior law, and by underfunding the State Retiree Benefits
Trust Fund.



Both the House and the Senate budgets rely on over $500 million worth
of budget-balancing strategies that are temporary in nature. This means
that the budget that comes out of conference will not likely provide
lasting solutions to the Commonwealth’s ongoing fiscal
challenges. The House and Senate budgets rely on significantly more
temporary solutions than the Governor had proposed primarily because of
differences in how they treat the health care cost shift issue
described above. The House and Senate reduce by $120 million the FY
2018 revenue from the assessment proposed by the Governor (and rely on
some new temporary strategies to make up most of that money) and they
also both make the new revenue temporary by sun-setting the assessment
after two years.





table: FY 2018 revenue and temporary budget savings proposals





Tax Revenue



The Senate FY 2018 budget proposal is similar to proposals by the House
and the Governor in terms of underlying revenue assumption and specific
tax policy proposals. All three proposals are based on the same
Consensus Revenue Estimates (CRE), as required by law. The
Revenue” section of MassBudget’s
“Analyzing the Senate Ways and Means Committee Budget
Proposal for FY 2018” compares proposals for tax
modernization, deposits, and rules for the Stabilization Fund, and a
proposed Tax Expenditure Review Commission.



In addition, the Senate adopted an amendment that would reduce the cost
of the Film Tax Credit by capping the amount of an
individual’s salary eligible for the program at $1 million
and also increasing – from 50 percent to 75 percent
– the portion of a production company’s filming
time or its budget that must be spent in Massachusetts in order to
qualify for the credit. The change is projected to save the
Commonwealth $14 million annually. For background, see
MassBudget’s fact sheet, “The Massachusetts Film
Tax Credit
.”



The Senate also adopted an amendment that would increase the tax on
flavored cigars to the same level as chewing tobacco in order to
provide $7 million in ongoing revenue directed to the Prevention and
Wellness Trust Fund. The Fund creates partnerships between community
organizations, health providers, and local governments to promote
healthier living and help residents to reduce tobacco usage, and avoid
falls, injuries, and hypertension. 



Another major difference between the Senate and House proposals that
will need to be reconciled in Conference Committee is the
Senate’s proposal to establish a commission, housed within,
but independent of, the Office of the State Auditor that would be
responsible for reviewing state “tax expenditures,”
also commonly referred to as tax breaks. This seven-member commission
would be charged with developing a schedule for the rolling review of
each tax expenditure, and then would assess each tax break to determine
its “purpose, intent and goal…and whether the
expenditure is an effective means of accomplishing those
ends.” The commission would consider past and future fiscal
and economic impacts of each expenditure, both to the state and to
municipalities. The commission would provide an annual report to the
Legislature compiling the commission’s activities and
findings. This report would include a recommendation for each
expenditure the unit has reviewed as to whether the expenditure should
be continued, amended, or allowed to end. The SWM budget provides
$100,000 to support staffing of the commission in FY 2018. (For a
longer discussion of tax breaks–and particularly special business tax
breaks–provided by the Commonwealth, see MassBudget’s report
on this issue.)



For a list of other revenue measures in the final Senate proposal that
were in the Senate Ways and Means Committee proposal, see
MassBudget’s “Revenue” section in the
Senate Ways and Means Committee Budget Monitor.



Department of Revenue Administration



Among its other activities, the Department of Revenue (DOR), through
its Office of Tax Administration, makes sure that taxpayers are paying
taxes they legally owe to the state. These activities are funded
through two primary accounts including the DOR administrative account
(1201-0100) and the Additional Auditors Retained Revenue account
(1201-0130). DOR hires auditors and collectors who identify taxes
legally owed to the state that have not yet been paid, and works with
taxpayers to collect these unpaid taxes.



Senate amendments did not change funding for these DOR tax activities.
The Senate proposes a combined $107.6 million, which is $1.0 million
more than the House proposal, and $4.2 million more than current FY
2017 funding levels. The Senate proposal for funding these activities
remains 39.3 percent below the 2001 level, when adjusting for
inflation. The DOR’s lower funding levels in recent years
partly reflect large numbers of employees who have taken part in the
Commonwealth’s early retirement program. Large staff
reductions can have implications for DOR’s ability to
identify and collect all the taxes owed to the Commonwealth, such as
those that lead to large tax settlements. If vacated positions are not
filled in future years (which will require reversing some or all of the
recent cuts), there is a danger that the cuts not only could reduce
permanently the Commonwealth’s ability to collect unpaid
taxes that are legally owed to the state, but also that such cuts could
engender greater levels of tax evasion. If sophisticated, well-financed
taxpayers come to view DOR’s audit and collection capacities
as permanently degraded, some of these taxpayers could see this as an
opportunity to reduce their tax payments through increased levels of
tax evasion or other forms of non-compliance.



You can see historical funding levels for administration of the DOR at
MassBudget’s Budget Browser here.



Non-Tax Revenue



There do not appear to be major differences in non-tax revenues between
the Senate and House Fiscal Year (FY) 2018 budget proposals. Both rely
on approximately $17.8 billion in non-tax revenues. These include
federal revenues, which are mostly reimbursements from the federal
government for state spending on Medicaid (MassHealth and related
costs); departmental revenues, which are fees, assessments, fines,
tuition, and similar receipts; and what are known as
“transfer” revenues, which include lottery
receipts, revenues from the newly-licensed gambling facilities, and
funds that the state draws from an assortment of non-budgeted trusts.



The House and Senate both rely on $15 million transferred out of
trusts, with the Senate proposal counting specifically on $15 million
from the Race Horse Development Fund to support operations at the
Department of Agricultural Resources and the Department of Conservation
and Recreation.



Because of slightly different spending assumptions, the House assumes
$2 million from new public health fees, while the Senate assumes $1
million from those fees. The budgets both appear to rely on:



  • $10 million in transfers to
    the General Fund from the liquidation of stocks and mutual funds held
    by the Commonwealth as “abandoned property”;

  • $43 million in federal
    reimbursement for health safety net payments to community health
    centers.




Employer Health Assessment



Over the past several years, the state’s health care costs
have grown as increasing numbers of private sector employees have
received health insurance through MassHealth, rather than receiving
health insurance through their employers. Both the House and Senate
include language authorizing a new assessment on employers to help
offset this shifting of costs. Depending on the design of the
assessment, it could also create an incentive for more employers to
offer affordable health insurance. In both the House and Senate
proposals, the assessment is temporary as they both include language to
sunset the assessment after only two years. The House and Senate differ
in how the assessment might be administered, but both recommend that
the Administration design the assessment to generate $180 million in FY
2018. The Governor had proposed a new and permanent assessment on
employers that would have generated $300 million in FY 2018.



Other Budget-Balancing Strategies



The Senate and House, like the Governor, balance their budgets
partially with savings by not making the full amount of a statutorily
required contribution towards funding for health insurance for state
retirees (see the “State Employee Health Insurance”
section of this Budget Monitor for an explanation). Depositing less in
the State Retiree Benefits Trust than required by statute is
essentially a “savings” of $129 million.



Similarly, the House and Senate both obtain temporary
“savings” from underfunding accounts relative to
anticipated costs. These accounts – which include funds for
snow and ice removal for winter storms, sheriffs, public counsel, and
(by the House) emergency shelter assistance – often receive
far less funding in the final, adopted budget than they eventually
require during the coming fiscal year. Since there is a legal right to
shelter and indigent defendants have a legal right to counsel in
Massachusetts, and since the Department of Transportation is
statutorily allowed to spend beyond budget to pay contractors for
addressing snow and ice removal, inadequate funding of these accounts
is typically made up for with substantial supplementary funding during
the year. Underfunding these accounts as part of the initial
appropriations process, however, creates a sizeable, though hidden hole
in the budget from the outset, one that will have to be filled as the
fiscal year moves ahead.



The Conference Committee will need to reconcile important differences
related to deposits into the Commonwealth’s Rainy Day Fund
(stabilization fund). The House budget includes a proposal from the
Governor’s budget to change how much capital gains tax
revenue is required to be deposited into the stabilization fund. Under
current law, all capital gains tax revenue collected in excess of a
statutorily-defined threshold (set at $1.169 billion for FY 2018) is to
be deposited into the Rainy Day Fund. The Governor proposed reducing
the requirement to one-half of the estimated excess capital gains
revenue anticipated during the coming fiscal year (he also includes
provisions that strengthen the requirement that this money actually be
deposited). This and related stabilization fund proposals by the
Governor are described in details in MassBudget’s
Analyzing the Governor’s Proposed FY 2018
Budget.
” This new approach to distributing capital gains tax
revenue would deliver $51 million to the Rainy Day Fund in FY 2018.
This amount is less than would be made under current law—if
current estimates for FY 2018 capital gains tax collections are met, a
deposit of $102 million would be made. The Senate proposes the same
deposit into the rainy day fund, but does not propose changing the law
to reduce permanently the required deposit of excess capital gains tax
revenue. From a technical perspective, this means that the
Senate’s use of some excess capital gains tax revenue to
balance the budget is a temporary solution while the same
isn’t true of the House and Governor’s budgets. But
that is only because those budgets propose a permanent reduction in the
amount of capital gains tax revenue that would be required to be
deposited into the rainy day fund. The Senate proposal would keep the
requirement that when the state is receiving capital gains tax revenues
at levels that are likely unsustainable, all of those excess amounts
should be deposited into the stabilization fund rather than used to
balance the budget.






TOTAL BUDGET BY CATEGORY
& SUBCATEGORY


In order to allow for more accurate comparisons from year to
year and
to better include all appropriated spending, MassBudget makes certain
adjustments to the way budget data are presented by the Administration
and Legislature.



The totals in the FY
2018 Senate, FY 2018 House, and FY 2018 Governor

columns show the proposals in the structure of the FY 2017 budget in
order to allow for more accurate across-year comparisons. The FY 2017
Current
column shows the budgeted General Appropriation
Act as enacted
in July 2016, and as amended by mid-year 9c cuts and by supplemental
budget legislation. For other explanatory information, see details
below the chart.



The FY 2017 total for State Employee Health Insurance reflects current
budgeted totals that may be artificially high because of a budgeting
glitch that is likely to be fixed. In fact, the Legislature is
currently considering legislation that would fund the State Retiree
Benefits Trust for FY 2017 at the level of 10 percent of the Tobacco
Settlement, which would reduce the FY 2017 State Employee Health
Insurance funding level in this table by $103.0 million. For more
explanation, see the “State Employee Health
Insurance” section of this Budget Monitor.


table: Budget by category and subcategory column headings


table data





MassBudget’s totals include the
“pre-budget
transfers
” of funds. Statutes require that the
Legislature
transfer portions of revenue prior to the appropriation process to
support certain functions. Although these transfers function no
differently from appropriations, the Governor and Legislature do not
reflect these expenditures in their budget totals; instead, they are
shown as amounts deducted or transferred from revenue prior to the
budgeting process. To better reflect total state funding, MassBudget
includes these pre-budget transfers in appropriation totals. In FY
2018, these add $4.43 billion to the total: tax revenues dedicated to
the MBTA and school building assistance, cigarette excises dedicated to
the Commonwealth Care Trust Fund, the state contribution to the pension
system, a transfer to the State Retiree Benefits Trust, and transfers
to the Workforce Training Trust.



MassBudget’s totals include annual appropriations into
non-budgeted
(“off-budget”) trusts
. The transfer of
funds from the General Fund or another budgeted fund into a
non-budgeted trust is a form of appropriation, and should be treated as
any other appropriation. Prior to FY 2011, the budget authorized these
transfers in Outside Section budget language. Starting in FY 2011, a
new section of the budget, Section 2E, systematically accounted for the
transfer of funds into off-budgeted trusts. MassBudget’s
totals include these operating transfers in all budget years.



When spending that is now included in the budget was previously
“off-budget,” MassBudget’s totals include
the prior years’ “off-budget” spending
totals in order to reflect more accurate year-to-year comparisons.
For
example, funding directed to health care providers as partial
reimbursement for uncompensated care was previously funded by a
transfer of federal revenue directly into the off-budget Uncompensated
Care Trust Fund. This spending was brought on-budget in FY 2009, and
incorporated into the state’s budgeted health care
appropriations. MassBudget health care budget totals include the
off-budget spending for these services in order to reflect a more
accurate across-year comparison.



MassBudget reduces State
Employee Health Insurance
totals to exclude
spending on health insurance for municipal employees and retired
teachers for which the state is fully-reimbursed by municipal
government.



MassBudget reduces funding for the community colleges, state
universities, and University of Massachusetts campuses by the amount of
tuition that these campuses remit to the state treasury each year.
These adjusted totals more accurately reflect the
“net” appropriations available to the campuses to
support operations, and allow for more consistent comparisons across
the years, since the policies about tuition
remission
have varied from
year to year and from campus to campus. For example, until FY 2003, all
the University of Massachusetts (UMass) campuses were required to remit
to the state treasury all tuition from all students. From FY 2004 to FY
2011, UMass Amherst (only) remitted only in-state tuition, and retained
tuition from out-of-state students. Starting in FY 2012, the remaining
UMass campuses were also allowed to retain tuition from out-of-state
students. Starting in FY 2017, UMass retained all tuition revenue,
remitting none. The MassBudget adjustments make it possible to make
meaningful comparisons of appropriations to these campuses even with
these policy changes.



MassBudget’s totals include budgeted funding paid for out of
anticipated reversions.
Reversions are unspent appropriations that are
typically returned to the General Fund at the end of the fiscal year.
For example, a portion of funding for health care for retired state
employees has in some years come from anticipated reversions of
appropriated debt service funds.



MassBudget’s totals reflect legislatively-approved
prior
appropriation continued
” (PAC) amounts. In
most instances, MassBudget shifts the PAC amount from the year in which
the funding was first appropriated into the year in which the
Administration expects to spend the totals.



Because MassBudget totals reflect budgeted appropriations and not
actual spending, there can be apparent fluctuations in the MassHealth
and Health Reform totals that are simply due to the timing of payments
to certain off-budget trusts. These budget variations may not reflect
real differences in spending.





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